United States authorities have released the “last substantial” package of regulations to combat offshore tax evasion in the Caribbean, saying the measures were also necessary to implement the Foreign Account Tax Compliance Act (FATCA).
The Department of the Treasury (DOT) and Internal Revenue Service (IRS) said the regulations make additions and clarifications to previously issued FATCA measures and provide guidance to coordinate FATCA rules with preexisting due diligence, reporting, and withholding requirements under other provisions of the Internal Revenue Code (Code).
“Offshore tax evasion undermines confidence in our tax system and deprives the United States of revenues necessary to protect and provide for its citizens,” said DOT Secretary Jacob J. Lew.
“There is significant momentum to implement FATCA across the globe, and we will continue to work closely with our international partners to combat these illicit activities and raise global tax standards,” he added.
The DOT said, each year, “some wealthy individuals evade millions of dollars in taxes through the use of offshore financial accounts that are not reported to the IRS or other tax authorities.
“This international tax evasion is illegal, contributes to the federal debt, and creates inequity within the tax system,” it added.
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